Page 56 - GTBank Annual Report 2020 eBook

reporting credit risk related issues. The Bank also Risk Management Overview
serves as the secretariat for the Management
Credit Committee. Credit risk is the most critical The Bank operates a functional Risk
risk for the Bank as credit exposures, arising from Management Group that manages all aspects of
lending activities account for the major portion of risk including threats and opportunities. The risk
the Bank’s assets and source of its revenue. management infrastructure therefore
Thus, the Bank ensures that credit risk related encompasses a comprehensive and integrated
exposures are properly monitored, managed and approach to identifying, managing and reporting:
controlled. The Credit Risk Management Bank is
responsible for managing the credit exposures, (i) the 3 main inherent Bank’s risks–Credit,
which arise as a result of the lending and Market and Operational;
investment activities as well as other unfunded
credit exposures that have default probabilities
such as contingent liabilities. (ii) additional core risks such as Reputation and
Strategy risks
Risk Management Methodology
The Bank recognizes that it is in the business of In addition to this, in compliance with the
managing risks to derive optimal satisfaction for regulations of the Central Bank of The Gambia
all stakeholders. It has therefore, over the years and also to align with Basel II Capital Accord /
detailed its approach to risk management through best global practices, we are in the process of
various policies and procedures, which include incorporating a strategic framework for efficient
the following: measurement and management of the bank’s
risks and capital. We have commenced the
implementation of Basel II recommended capital
ERM Policy
measurement approaches for the estimate of the
bank’s economic capital required to cope with
Credit Policy Guide
unexpected losses. We are also putting in place
other qualitative and quantitative measures that
Human Resources Policy Manual will assist with enhancing risk management
processes and creating a platform for more risk-
Standard Operating Procedures adjusted decision-making.

IT Policy Credit risk

To ensure adherence to the policies and Lending and other financial activities form the
procedures, several exception reports on core business of the Bank. The Bank recognizes
customers and activities of the Bank are this and has laid great emphasis on effective
generated by the various audit control units for management of its exposure to credit risk. The
management’s decision making. These include: Bank defines credit risk as the risk of
counterparty’s failure to meet the terms of any
lending contracts with the Bank or otherwise to
Monthly Management Profitability perform as agreed. Credit risk arises anytime
Reports (MPR) for the marketing teams the Bank’s funds are extended, committed,
invested or otherwise exposed through actual or
Monthly Operations Performance implied contractual agreements.
Reports(OPR) for the support teams The Bank’s specific credit risk objectives, as
contained in the Credit Risk Management
Quarterly Business Profitability Review Framework, are:

Annual Bank-wide performance Maintenance of an efficient loan portfolio
appraisal systems
Institutionalization of sound credit culture
Criticized Asset Committee Report in the Bank Annual Report 2020

Guaranty Trust Bank Gambia Limited www.gtbankgambia.com 54